Age takes toll on
European growth
When Gordon
Brown calls for economic
reform in Europe, he bangs on
about competition, labour
markets, and (as he put it
yesterday) a "foundation
of proactive, forward-looking
monetary and fiscal
policies." He might find
his audience less likely to
glaze over if he addressed a
more fundamental problem - the
need for a proactive,
forward-looking policy on
bonking.
This really
would allow the eurozone to
start growing again. Strange
as it may seem, the legendary
lotharios of Italy, the German
gigolos and the Spanish
seducers are not doing their
stuff. Or if they are, someone
is taking precautions, since
there is little to show for
it.
Citigroup's
Darren Williams has looked at
the birth rate in the eurozone,
which is among the lowest
anywhere. It now takes two
European women to produce
three children (or, if you
prefer, they are having only
1.5 children each).
A couple of
generations ago, the mamas,
frauleins and senoras were
podding at twice that rate.
The Italians, for all their
love of bambinos, are not
putting their passion into
practice. At their current
rate of reproduction, there
will be four Italians in 2020
for every five today.
Before you
cheer at fewer mouths to feed
in a crowded world, ask who
will look after you in your
old age, considering the
dearth of young labour that
must follow such a precipitous
fall in numbers. To see the
effect, look at Japan, where
children are seen as
unaffordable luxuries. Health
and pension costs are soaring
just when the number of
workers and taxpayers falls,
and economic stagnation is the
result.
The Japanese
government has borrowed to
cover the gap, and Mr Williams
reckons eurozone government
debt could triple as the
member countries do the same.
Unless the Europeans get on
with it, the ageing of Europe
could turn it into the Japan
of the 2020s.
The new
entrants to the European Union
will not be much help, either,
since the former Soviet
satellites are even slower at
reproducing. Only Turkey, with
a big, young and rapidly
rising population, offers the
prospect of new labour, and it
is forever being kept out of
the EU.
Apart from a
startling change in bedtime
habits, immigration is the
best hope for the next
generation of euro-oldies. As
this week's re-revised figures
show, our government hasn't a
clue how many people are
coming here, but it's clear
they are young, fecund and
(mostly) keen to work. Just as
well, since fewer workers
means lower economic growth.
When Mr
Brown next reassesses his five
tests for the euro, he should
add another: demographics.
